Stratasys Reports First Quarter 2015 Financial Results

Company reports $173 million in revenue for the first quarter

Company reports first quarter non-GAAP net income of $2.0 million, or $0.04 per diluted share; and GAAP net loss of $216.3 million, or ($4.24) per share

MINNEAPOLIS & REHOVOT, Israel--(BUSINESS WIRE)-- Stratasys Ltd. (NASDAQ:SSYS) today announced financial results for the first quarter of 2015.

Q1-2015 Financial Results Summary:

  • Revenue for the first quarter of 2015 was $172.7 million, which includes an approximate $7.8 million negative impact on revenue from the stronger U.S. dollar on a constant currency basis when compared to the same period last year.
  • GAAP net loss for the first quarter was $216.3 million, or ($4.24) per share, compared to GAAP net income of $4.1 million, or $0.08 per diluted share, for the same period last year.
  • Non-GAAP net income for the first quarter was $2.0 million, or $0.04 per diluted share, compared to non-GAAP net income of $20.6 million, or $0.40 per diluted share, reported for the same period last year.
  • The Company invested a net amount of $24.4 million in R&D projects (Non-GAAP basis) during the first quarter, representing 14.1% of revenues.
  • The Company generated $3.9 million in cash from operations during the first quarter, and currently holds approximately $425 million in cash and cash equivalents, and short term bank deposits. The cash balance includes a $50 million drawdown on the Company’s revolving credit facility.
  • Non-GAAP EBITDA for the first quarter amounted to $2.2 million.
  • The Company updated the goodwill impairment analysis of its MakerBot reporting unit. As a result, the Company recognized a non-cash goodwill and other intangible asset impairment expense of $194 million in the first quarter.
  • The Company sold 7,536 3D printing and additive manufacturing systems during the quarter, and on a pro forma combined basis, has sold a total of 129,197 systems worldwide as of March 31, 2015.

"We continue to see significant long-term opportunity in the 3D printing and additive manufacturing market," said David Reis, chief executive officer of Stratasys. "We believe we are offering a transformative alternative to conventional manufacturing, design and engineering processes, and maintain an attractive pipeline of future opportunities. Although we have modified our near-term operating and capital investment plans to align with softness in market conditions, we will remain focused on the future, and continue to execute on a multi-year investment plan designed to drive accelerated adoption of 3D printing solutions and increased sales growth.”

Business Highlights:

  • Announced that Stratasys additive manufacturing solutions were selected by leading aircraft manufacturer Airbus to produce 3D printed flight parts for use in the first-of-type A350 XWB aircraft. Airbus produced more than 1,000 flight parts with their Stratasys FDM 3D Production Systems to support the delivery of the aircraft in December 2014. The 3D printed parts are used in place of traditionally manufactured parts with a process that reduces cost, increases supply chain flexibility, and improves on-time delivery. The announcement is the culmination of a long-term, multi-year effort by both Stratasys and Airbus to identify, certify, and then implement Stratasys production solutions.
  • Announced organizational enhancements including the creation of the Stratasys Strategic Consulting Division to help support customer development; the appointment of Joshua Claman, formerly with Dell, to Chief Business Officer to drive commercial and go-to-market activities across the company's different business units; and the appointment of Jerome Hamilton, formerly with 3M, as Senior Vice President of Global Operations to lead global manufacturing, strategic sourcing, supply chain, and worldwide distribution teams.
  • Completed the organizational integration of Solid Concepts, Harvest Technologies and RedEye Services to form Stratasys Direct Manufacturing (SDM), a comprehensive part services offering that employs a broad set of technologies and materials for applications ranging from models and prototypes, to end-use components and assemblies.
  • Initiated a reorganization within MakerBot, which is intended to focus efforts on improving products, growing the 3D ecosystem, and increasing our efforts in the professional, education and consumer markets.

"We believe our partnership with Airbus represents a landmark introduction of our FDM additive manufacturing process for aerospace applications, and is an example of the large opportunities that exist within our industry, which we believe will be increasingly tied to manufacturing applications and vertical industry solutions," continued Reis. "In addition, we continue to position Stratasys for future growth through our multi-year investment plan, which focuses on enhancing vertical solution development, expanding customer support services, accelerating product development, and growing our sales and marketing infrastructure."

2015 Guidance

The Company provided guidance for full-year 2015 as follows:

  • Total revenue in the range of $800 to $860 million, with non-GAAP net income in the range of $63 to $90 million, or $1.20 to $1.70 per diluted share.
  • GAAP net loss of $256 million to $224 million, or ($5.0) to ($4.38) per share.
  • Capital expenditures of $80 to $110 million.
  • Total operating expenses in 2015 are expected to be in the range of 46% to 47% of anticipated revenue.
  • Projected Non-GAAP net income is expected to be derived disproportionately from the second half of fiscal 2015, driven by the projected timing of revenue and operating expenses.
  • Non-GAAP earnings guidance excludes $78 million of projected amortization of intangible assets; $35 million to $38 million of share-based compensation expense; $28 million to $30 million in non-recurring expenses related to acquisitions; $197 to $199 million in goodwill and other intangible asset impairment and restructuring charges; and includes $24 million to $26 million in tax expenses related to Non-GAAP adjustments.

Stratasys Ltd. Q1-2015 Conference Call Details

Stratasys will hold a conference call to discuss its first quarter financial results on May 11, 2015 at 8:30 a.m. (ET).

The investor conference call will be available via live webcast on the Stratasys Web site at under the "Investors" tab; or directly at the following web address:

The conference call script and accompanying slide presentation will be available on the Stratasys Web site at under the "Investors" tab.

To participate by telephone, the domestic dial-in number is (800) 299-9630 and the international dial-in is (617) 786-2904. The access code is 43637463. Investors are advised to dial into the call at least ten minutes prior to the call to register.

The webcast will be available for 90 days on the "Investors" page of the Stratasys Web site or by accessing the provided web address.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this press are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are characterized by the use of forward-looking terminology such as "will," "expects," "anticipates," "continue," "believes," "should," "intended," "projected," “guidance,” “preliminary,” “future,” “planned,” “committed,” or other words. These forward-looking statements include, but are not limited to, statements relating to the company's objectives, plans and strategies, statements of preliminary or projected results of operations or of financial condition and all statements that address activities, events or developments that the company intends, expects, projects, believes or anticipates will or may occur in the future. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. The company has based these forward-looking statements on assumptions and assessments made by its management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things: the company's ability to efficiently and successfully integrate the operations of Stratasys, Inc. and Objet Ltd. after their merger as well as MakerBot, Solid Concepts, and Harvest Technologies after their acquisitions and to successfully put in place and execute an effective post-merger integration plans; the overall global economic environment; the impact of competition and new technologies; general market, political and economic conditions in the countries in which the company operates; projected capital expenditures and liquidity; changes in the company's strategy; government regulations and approvals; changes in customers' budgeting priorities; litigation and regulatory proceedings; and those factors referred to under "Risk Factors", "Information on the Company", "Operating and Financial Review and Prospects", and generally in the company's annual report on Form 20-F for the year ended December 31, 2014 filed with the U.S. Securities and Exchange Commission (the "SEC"), in the "Risk Factors" attached as Exhibit 99.3 to the Report of Foreign Private Issuer on Form 6-K furnished by the company to the SEC on the date hereof, and in other reports that the company has furnished to, or filed with the SEC. Readers are urged to carefully review and consider the various disclosures made in the company's SEC reports, which are designed to advise interested parties of the risks and factors that may affect its business, financial condition, results of operations and prospects. Any guidance and other forward-looking statements in this press release are made as of the date hereof, and the company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Discussion Disclosure

The information discussed within this release includes financial results and projections that are in accordance with accounting principles generally accepted in the United States of America (GAAP). In addition, certain non-GAAP financial measures have been provided excluding certain charges, expenses and income. The non-GAAP measures should be read in conjunction with the corresponding GAAP measures and should be considered in addition to, and not as an alternative or substitute for, the measures prepared in accordance with GAAP. The non-GAAP financial measures are included in an effort to provide information that investors may deem relevant to evaluate results from the company's core business operations and to compare the company's performance with prior periods. The non-GAAP financial measures primarily identify and exclude certain discrete items, such as merger-related expenses, amortization of intangible assets, one time write off of deferred tax assets, impairment charges, and expenses associated with share-based compensation required under ASC 718. The company uses these non-GAAP financial measures for evaluating comparable financial performance against prior periods.

This release is available on the Stratasys web site at

Stratasys Ltd. (Nasdaq:SSYS), headquartered in Minneapolis, Minnesota and Rehovot, Israel, is a leading global provider of 3D printing and additive and additive manufacturing solutions. The company's patented FDM®, PolyJet™ and WDM™ 3D Printing technologies produce prototypes and manufactured goods directly from 3D CAD files or other 3D content. Systems include 3D printers for idea development, prototyping and direct digital manufacturing. Stratasys subsidiaries include MakerBot and Solidscape, and the company operates a digital-manufacturing service comprising RedEye, Harvest Technologies and Solid Concepts. Stratasys has more than 2,800 employees, holds over 800 granted or pending additive manufacturing patents globally, and has received more than 25 awards for its technology and leadership. Online at: and

Stratasys Ltd.
Consolidated Balance Sheets
(in thousands)
March 31, December 31,
  2015     2014  
Current assets
Cash and cash equivalents $ 423,032 $ 442,141
Short-term bank deposits 1,907 595
Accounts receivable, net 142,421 150,806
Inventories 130,958 123,385
Net investment in sales-type leases 8,682 8,170
Prepaid expenses 8,601 7,931
Deferred income taxes 26,569 25,697
Other current assets   20,084     37,903  
Total current assets   762,254     796,628  
Non-current assets
Goodwill 1,171,077 1,323,502
Other intangible assets, net 534,301 597,903
Property, plant and equipment, net 164,959 157,036
Net investment in sales-type leases - long term 16,129 14,822
Other non-current assets   10,478     9,216  
Total non-current assets   1,896,944     2,102,479  
Total assets $ 2,659,198   $ 2,899,107  
Current liabilities
Accounts payable $ 47,607 $ 37,359
Short term debt 50,000 50,000
Accrued expenses and other current liabilities 47,069 47,760
Accrued compensation and related benefits 36,826 42,332
Obligations in connection with acquisitions 11,313 28,092
Deferred revenues   47,127     45,023  
Total current liabilities   239,942     250,566  
Non-current liabilities
Obligations in connection with acquisitions - long term 17,443 26,461
Deferred tax liabilities 43,035 55,835
Deferred revenues - long-term 5,359 5,946
Other non-current liabilities   28,918     25,091  
Total non-current liabilities   94,755     113,333  
Total liabilities   334,697     363,899  
Redeemable non-controlling interests 3,850 3,969
Ordinary shares, NIS 0.01 nominal value, authorized 180,000
shares; 51,016 and 50,923 shares issued and outstanding
at March 31, 2015 and December 31, 2014, respectively 139 139
Additional paid-in capital 2,579,874 2,568,149
Accumulated deficit (250,159 ) (33,871 )
Accumulated other comprehensive loss   (9,675 )   (3,647 )
Equity attributable to Stratasys Ltd. 2,320,179 2,530,770
Non-controlling interest 472 469
Total equity   2,320,651     2,531,239  
Total liabilities and equity $ 2,659,198   $ 2,899,107  
Stratasys Ltd.
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended March 31,
2015 2014
(unaudited)   (unaudited)
Net sales
Products $ 126,667 $ 129,252
Services   46,064     21,689  
172,731 150,941
Cost of sales
Products 98,371 61,022
Services   28,272     12,191  
126,643 73,213
Gross profit 46,088 77,728
Operating expenses
Research and development, net 27,238 16,771
Selling, general and administrative 102,608 67,617
Goodwill impairment 150,400 -
Change in the fair value of obligations in connection with acquisitions   (13,256 )   (7,495 )
266,990 76,893
Operating income (loss) (220,902 ) 835
Financial expense (5,124 ) (1,336 )
Loss before income taxes (226,026 ) (501 )
Income tax benefit   (9,622 )   (4,588 )
Net income (loss) (216,404 ) 4,087
Net loss attributable to non-controlling interest   (116 )   -  
Net income (loss) attributable to Stratasys Ltd. $ (216,288 ) $ 4,087  
Net income (loss) per ordinary share attributable to Stratasys Ltd.
Basic $ (4.24 ) $ 0.08
Diluted (4.24 ) 0.08
Weighted average ordinary shares outstanding
Basic 50,956 49,273
Diluted 50,956 51,240
Stratasys Ltd.
Reconciliation of GAAP to Non-GAAP Results of Operations
(in thousands, except per share data)
Three Months Ended March 31, 2015 Three Months Ended March 31, 2014
(unaudited)   Adjustments*   (unaudited) (unaudited)   Adjustments*   (unaudited)
Net sales
Products $ 126,667 $ - $ 126,667 $ 129,252 $ 235 $ 129,487
Services   46,064     -     46,064     21,689     -     21,689  
172,731 - 172,731 150,941 235 151,176
Cost of sales
Products 98,371 (45,912 ) 52,459 61,022 (13,728 ) 47,294
Services   28,272     (1,409 )   26,863     12,191     (433 )   11,758  
126,643 (47,321 ) 79,322 73,213 (14,161 ) 59,052
Gross profit 46,088 47,321 93,409 77,728 14,396 92,124
Operating expenses
Research and development, net 27,238 (2,817 ) 24,421 16,771 (1,496 ) 15,275
Selling, general and administrative 102,608 (32,844 ) 69,764 67,617 (13,522 ) 54,095
Goodwill impairment 150,400 (150,400 ) - - - -
Change in the fair value of obligations in connection with acquisitions   (13,256 )   13,256     -     (7,495 )   7,495     -  
266,990 (172,805 ) 94,185 76,893 (7,523 ) 69,370
Operating income (loss) (220,902 ) 220,126 (776 ) 835 21,919 22,754
Financial expense (5,124 ) - (5,124 ) (1,336 ) - (1,336 )
Income (loss) before income taxes (226,026 ) 220,126 (5,900 ) (501 ) 21,919 21,418
Income taxes (benefit)   (9,622 )   1,814     (7,808 ) 132.3 %   (4,588 )   5,408     820  
Net income (loss) (216,404 ) 218,312 1,908 4,087 16,511 20,598
Net loss attributable to non-controlling interest   (116 )   -     (116 )   -     -     -  
Net income (loss) attributable to Stratasys Ltd. $ (216,288 ) $ 218,312   $ 2,024   $ 4,087   $ 16,511   $ 20,598  
Net income (loss) per ordinary share attributable to Stratasys Ltd.
Basic $ (4.24 ) $ 0.04 $ 0.08 $ 0.42
Diluted (4.24 ) 0.04 0.08 0.40
Weighted average ordinary shares outstanding
Basic 50,956 50,956 49,273 49,273
Diluted 50,956 52,341 51,240 51,240
The Company considers these non-GAAP measures to be indicative of its core operating results and facilitates a comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes, however these measures should not be viewed as a substitute for the Company’s GAAP results.


* Refer to the "Reconciliation of Non-GAAP Adjustments" herein for further information regarding adjustments.

Stratasys Ltd.
Reconciliation of Non-GAAP Adjustments
(in thousands)
Three Months Ended March 31,
2015 2014
Net sales, products
Deferred revenue step-up amortization $ - $ 235
Cost of sales, products
Acquired intangible assets amortization (14,905 ) (13,225 )
Intangible assets impairment (29,782 ) -
Non-cash stock-based compensation expense   (1,225 )   (503 )
(45,912 ) (13,728 )
Cost of sales, services
Non-cash stock-based compensation expense (608 ) (409 )
Merger and acquisition related expense   (801 )   (24 )
(1,409 ) (433 )
Research and development, net
Non-cash stock-based compensation expense (1,868 ) (938 )
Merger and acquisition related expense   (949 )   (558 )
(2,817 ) (1,496 )
Selling, general and administrative
Acquired intangible assets amortization (6,456 ) (5,364 )
Non-cash stock-based compensation expense (6,059 ) (4,886 )
Merger and acquisition related expense (6,906 ) (3,272 )
Intangible assets impairment   (13,423 )   -  
(32,844 ) (13,522 )
Goodwill impairment (150,400 ) -
Change in the fair value of obligations in connection with acquisitions
Change in the fair value of obligations in connection with acquisitions 13,256 7,495
Income taxes
Tax expense related to non-GAAP adjustments 1,814 5,408
Net income $ 218,312   $ 16,511  
Stratasys Ltd.
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
Fiscal Year 2015
(in millions, except per share data)
GAAP net loss ($256) to ($224)


Stock-based compensation expense $35 to $38
Intangible assets amortization expense $78
Goodwill and other intangible asset impairment and restructuring charges $197 to $199
Merger related expense $28 to $30
Tax expense related to Non-GAAP adjustments ($24) to ($26)
Non-GAAP net income $63 to $90
GAAP loss per share ($5.0) to ($4.38)
Non-GAAP diluted earnings per share $1.20 to $1.70

Stratasys Ltd.
Shane Glenn, 952-294-3416
VP Investor Relations

Source: Stratasys Ltd.